Apfel hat Logistikproblem! (probably)

Yo Bento. Explain this, you Apple fanboy. You know I am not a great fan of Apple, nor the iPhone as a business proposition. I think this handset venture will prove an expensive white elephant; I think it blow up Apple stock eventually. I vastly prefer Research in Motion and, until recently, Nokia, as investment ideas.

Everyone is telling me that you can’t get iPhones for love or money in Apple shops in the US, and that indeed, there’s a 5-7 day waitlist. But not to worry, there’s no component issue or supply cock-up, they are just destocking because of the imminent launch of the 3G iPhone. In the words of one inveterate Apple shill:

Folks, we’re in April. May is just around the corner. Same with June [sic]. Apple’s worldwide developer conference is on June 9 in San Francisco. It stands to reason that if a new 3G iPhone is on the way, then why in the world would Apple continue to manufacture and then stock older versions that would just collect dust on store shelves?

So then today, basking in the warm glow of an absolutely killer RIMM quarter, calculating my vast profits, rubbing my hands and cackling, I see this: in Germany not only can you get an iPhone, absolutely no problem, but now it comes at a special price for you mein Freund. T-Mobile cut the price to 99 Euros with the top rate monthly contract of EUR89/month, and the handset goes up in price by EUR50 for every tariff plan below that.

The article (which I won’t translate for you) says “there are only 2 possible explanations”, mentions the imminent 3G iPhone launch as one, and then points out what I have been saying all along: the demand has just not been there in Europe.So let’s get this straight: in the biggest, most loyal market for iPhones, in the most profitable channel where you don’t have any payaway and have no rivals in stock, Apple has organised it so there’s no actual stock. In the most sceptical market where demand is lowest, they have so many they need to discount. Hmm. Maybe Steve Jobs just wants Euros, like Jay-Z. Or maybe this handset business isn’t quite as easy as Apple thought.

There are a few other issues:

High end handsets in Europe seem to have fallen off a cliff somewhat, with high end specialist Sony-Ericsson warning, and Nokia has been very clearly cutting orders at chipset suppliers. When Apple launches its 3G version, it won’t be into a very buoyant market

iPhone v.1.0 was actually launched at the very end of June last year, so was really only available in July. If v.2.0 follows the same timetable as seems likely it would be crazy to starve the channel at the start of April

v.2.0 specs are NOT going to be too impressive, most notably in terms of the camera, which will stay 2.0mpxl, while high end competitors have standardised on 5mpxl, and are likely to go higher very soon

Expectations are NOT reasonable. The Piper analyst was going on about 45m iPhone units across different price points being sold in 2009, which would be about the same volume as Nokia’s high end “Multimedia Computer” N-series range, and I have 33m handsets only for all of RIMM’s range in 2009, and they’ve been selling handsets for 10 years. These analysts are on drugs

No, this is all grist to my anti-AAPL mill. Sell your stock Bento, it’s gone up a bit recently. You know Spinoza would be short.

Update:Oh my. How could I have missed this! Blodget, via Abnormal Returns. This sort of makes sense, at least is possible. An annualised run rate of 10m iPhones are being whisked out of JFK and unlocked in Russia, China, India and the Middle East, according to an anonymous blog commenter. It could at least partially explain the disconnect above. However, while it would mean a lot less downside for near-term AAPL estimates (so long as I assume the 20k units/week number is right), it would still suck vs sell side estimates in out years. I would note they’re not likely to get the $15-20/month share of AT&T revenues off these Russian users. Moreover I am not sure how exactly it is possible to buy an iPhone without a contract in the US. I am sure it is possible, but maybe someone can explain it to me. Can you just walk out of an Apple Store with an iPhone sans AT&T contract? Would that not rather annoy AT&T?

3 thoughts on “Apfel hat Logistikproblem! (probably)”

Not only can you walk out of an Apple store without an AT&T contract, you must. The iPhone comes in a box, you take it home, you unwrap it, you plug it in to your computer, you activate it. I honestly don’t know if it’s even possible to activate an iPhone if you don’t have a computer connected to the internet.